The To Complete Performance Index (TCPI) is the third forecasting tool mentioned in the PMBOK Guide.

This is a relatively new term which was coined by the PMI to assist project managers in calculating the future cost performance of the project.

Since the concept of TCPI is new and there is not much research available on this topic, it often confuses many people.

So I’ve decided to write a blog post on this topic.

First, I will explain to you the definition, next I will show you a real-world example, and then finally I will give you mathematical examples to clarify this concept for you.

Okay, let’s get started.

### To Complete Performance Index (TCPI)

The To Complete Performance Index (TCPI) gives you the future cost performance index that you must follow for the remaining work if you want to complete it within the given budget.

As per the PMBOK Guide, fifth edition:

“TCPI is the calculated cost performance index that is achieved on the remaining work to meet the specified management goal, such as the BAC or the EAC.”

Put more simply, the To Complete Performance Index (TCPI) is the estimate of the future cost performance that you may need to complete the project within the approved budget. This budget may be your initial approved budget (BAC), or a newly calculated budget/estimate at completion (EAC).

You can calculate the TCPI by dividing the remaining work by the remaining funds; i.e.

TCPI = (Remaining Work) / (Remaining Funds)

You can calculate the remaining work by subtracting the earned value from the total budget; i.e. (BAC – EV). However, there are two cases to determine the remaining funds on hand. In the first case, you determine the remaining funds when you are under budget and in the second case when you are over budget.

So, in these cases, the formula to calculate the To Complete Performance Index (TCPI) formula will be different.

Let us discuss these two cases in detail.

__Case I: You’re Under Budget__

In this case, the remaining funds will be calculated by subtracting the “actual cost incurred to date” from the “initial budget”; i.e. (Budget at Completion (BAC) – Actual Cost (AC)).

Here, the TCPI formula will be:

TCPI = (BAC – EV) / (BAC – AC)

**Example of TCPI: Case I**

You are working on a project to be completed in 24 months and the BAC of the project is 200,000 USD. Twelve months have passed and 110,000 USD has been spent, and 60% of the work has been completed so far.

Find the To Complete Performance Index (TCPI) for this project.

Given in the question:

Budget at Completion (BAC) = 200,000 USD

Actual Cost (AC) = 110,000 USD

Planned Value (PV) = 50% of 200,000

= 100,000 USD

Earned Value (EV) = 60% of 200,000

= 120,000 USD

Cost Performance Index (CPI) = EV / AC

= 120,000 / 110,000

= 1.1

Since the cost performance index is 1.1, which is greater than one, you are under budget. Therefore, in this case you will use the TCPI formula based on the BAC.

Hence,

TCPI = (BAC – EV) / (BAC – AC)

= (200,000 – 120,000) / (200,000 – 110,000)

= 80,000 / 90,000

= 0.89

This means that you can continue with a Cost Performance Index of 0.89 to complete the project.

__Case II: You’re Over Budget__

In this case, the remaining funds will be calculated by subtracting the actual cost incurred to date from the estimate at completion; i.e. (EAC – AC).

Here, the TCPI will show you the required cost performance to complete the project with the newly calculated budget.

TCPI = (BAC – EV) / (EAC – AC)

**Example of TCPI: Case-II**

You have a project to be completed in 12 months and the budget of the project is 100,000 USD. Six months have passed and 60,000 USD has been spent, but on closer examination you find that only 40% of the work has been completed so far.

Find the To Complete Performance Index (TCPI) for this project.

Given in the question:

Budget at Completion (BAC) = 100,000 USD

Actual Cost (AC) = 60,000 USD

Planned Value (PV) = 50% of 100,000

= 50,000 USD

Earned Value (EV) = 40% of 100,000

= 40,000 USD

Cost Performance Index (CPI) = EV / AC

= 40,000 /60,000

= 0.67

Hence, the Cost Performance Index (CPI) = 0.67

Since the cost performance index is less than one, you are over budget. Now you will calculate the new estimate at completion and use the formula for case II which is based on the EAC.

Estimate at Completion (EAC) = BAC / CPI

= 100,000 / 0.67

= 149,253.73 USD

Hence, Estimate at Completion (EAC) = 149,253.73 USD

Now, TCPI = (BAC – EV) / (EAC – AC)

= (100,000 – 40,000) / (149,253.73 – 60,000)

=60,000 / 89,253.73

=0.67

TCPI = 0.67

This means that you can continue with a Cost Performance Index of 0.67 to complete the project.

Remember that if you have calculated the estimate at completion using the earned value management formula (EAC = BAC / CPI), the TCPI will be equal to the CPI at the moment when you calculate the TCPI the first time. This is because while calculating the estimate at completion (EAC) you have already assumed that the future cost performance of the project will be the same as the past cost performance of the project.

We have finished outlining the technical details of the To Complete Performance Index (TCPI), so now let’s see the use of TCPI a real-world scenario.

Suppose you have been given a job to paint 10,000 square feet in 10 days. This means you have to paint 1,000 square feet per day to complete the project on time.

You start the painting job but when you review your progress after 5 days, you find that only 3,000 square feet has been painted.

Now you have 5 days left and 7,000 square feet is yet to be painted. You calculate and deduce that if you want to complete your task within 10 days, you will have to paint 1,400 square feet per day.

This will be your future performance to complete the task on time, and this future performance is known as the To Complete Performance Index (TCPI). Please note that the Cost Performance Index (CPI) is your past performance and the TCPI is your future performance which you must meet to complete the project within the approved budget.

You may also consider what will happen if you perform better; i.e. you painted 7,000 square feet in 5 days. This means that you now have to paint 3,000 square feet in 5 days. In this case, you can paint 600 square feet per day to complete the task. In other words, you can comfortably complete the task.

Before I conclude this post, let’s revisit some key points:

- CPI is the past cost performance of the project; on the other hand, TCPI is the future cost performance of the project.
- If you are under budget, you will calculate the TCPI based on the BAC.
- If you are over budget, you will calculate the TCPI based on the EAC.
- If the To Complete Performance Index is less than one, you are in a comfortable position.
- If the To Complete Performance Index is greater than one, you have to perform with a better cost performance than the past cost performance.
- If the To Complete Performance Index is equal to one, you can continue with the same cost performance.

### Summary

The To Complete Performance Index is a forecasting tool that helps you find the future efficiency of the project which you have to follow for the remaining work of the project in order to complete the project within the budget. If the TCPI is less than one, it is good news for you, while in the case of performance indexes, the opposite is true; i.e. if the indexes are greater than one, it is good for the project.

This is the last installment in a series of seven articles on earned value analysis, forecasting and the To Complete Performance Index. If you have any questions or comments, you can contact me through the comments section below.

If you are interested in learning all the mathematical formulas for the PMP exam, you can try my PMP Formula Guide. You can also try my PMP Question Bank and PMP Mock Test to practice PMP exam sample questions.

sameh says

hello Fahad,

as I understood, if I have CPI >1 we are under budget and we can use TCPI=BAC-EV/BAC-AC in this case TCPI < 1 so we are comfortable.

but if I have CPI 1 (example 1.5 ) so we are uncomfortable and we have to work with efficiency =150% to be within budget BAC.

in case we can not work with this 150% we will make new budget EAC=BAC/CPI and TCPI will be less than 1 which is equal to CPI but based on new estimate to be within EAC not BAC

PLEASE CORRECT ME IF I AM WRONG

Fahad Usmani says

You will to check the cause of this deviation. If it is temporary error and for the rest of the work can be performed as planned, you will not use this formula (BAC/CPI).

Anyway, after the new budget approved, EAC is the BAC.

sameh says

if CPI <1 and not temporary we will use : EAC=BAC/CPI for future performance

if CPI <1 and Temporary we will use : EAC =AC+(BAC-EV) for future performance

if CPI < 1 and SPI <1 we will use EAC = AC+ (BAC-EV)/(CPI*SPI)

please correct me if I am wrong

please how can I relate TCPI formula with these conditions

Fahad Usmani says

Please read the blog post.

If you are over budget you will use the formula based on new budget (EAC) otherwise with the current budget (BAC)

sameh says

If I have CPI 1

If I have CPI < 1 and SPI 1 and SPI 1 and SPI >1

What TCPI formulas will be

Muhammad Asad Tanwir says

Hi Fahad,

Can you please tell me what if your tcpi comes 2.38. is it OK or the question is not correct. Because i think tcpi moves around 1 and do go beyond. kindly help.

Question is:

BAC=240000 divided equally over 12 months.

Today is 10th month

Project snapshot indicates that only 80% of Planned work could be Earned till today.

Actual Cost is 205000.

Now i am confused EV is 80% of PV or BAC. if i take 80% of PV then tcpi is more than 2 and if of BAC then its 1.34. KIndly help me out of it.

Muneeb says

Wonderful article. Thank you very much, it explained the concept brilliantly.

Fahad Usmani says

You are welcome Muneeb.

Emad Elkordy says

Thank you very much for your great article as you always do, yet I have a reasonable question:

In both examples of TCPI: you assume that PV = 50% of BAC, based on an elapsed period of 12 months out of 24 months (project duration), and my relative question:

Is the relation between cost and time in the original plan a linear one?

Fahad Usmani says

This is just an assume data. In original plan it may or may not liner. This is not a mandatory condition.

Emad Elkordy says

Thank you for you reply.

I commented because many questions provide such data, and let the answerer assume that.

I think it shouldn’t be like that as Cost and Time do not have not linear relationship unless the project comprises one activity with uniformly distributed cost, which is very rare.

Fahad Usmani says

Here I tried to take a simplest example to make this concept clear to my reader.

Luoluo says

I think the problem with the example is that it only considered one out of three EAD scenarios, which is the forecast EAC will be the same as present CPI. So the TPCI will remain the same, since the budget is increased according, making the sample seems meaningless.

You are mentioned the other 2 scenarios so others can understand better.

Fahad Usmani says

What is EAD?

Hazra says

Helo Fahad,

Great blog, learning so much and your explanations are great and makes me understand the concept better.

I am confused with your statements below:

“If the To Complete Performance Index is less than one, you are in a comfortable position.” – If it is less than one it means you are over budget, then how can you be in a comfortable position. Please explain what I am missing.

“If the To Complete Performance Index is greater than one, you have to perform with a better cost performance than the past cost performance.” – If it is greater than one then you are under budget i.e. you have money left in hand. That is good right?

Can you please help me understand this better.

Fahad Usmani says

You are confusing it with cost performance index.

TCPI is the future cost performance that you should achieve to complete the project within approved budget.

Hazra Hadee says

Thank you Fahad

Fahad Usmani says

You are welcome Hazra.

Aizuddin says

Assalamualaikum Fahad,

What if the CPI = 1? which formula should we used?

I encountered below question, appreciate your advise.

Initial budget estimate of a project is 100.000USD. During execution of the project, Estimate at Completion (EAC) of the project has been found as 120.000USD. If earned value of the project is 20.000USD and CPI is 1.0, what is the TCPI of the project?

A) 0.8

B) 1.0

C) 1.2

D) 1.4

I answered it B = 1.0 since CPI =1, then EAC = BAC. I used TCPI under budget formula. But i got it wrong. The correct answer is A = 0.8, using TCPI over budget formula.

Thanks

Fahad Usmani says

If the CPI is 1, this means you are on track. Why would you calculate the TCPI?

Saugat says

Thanks Fahad,

Very nicely explained

Fahad Usmani says

You are welcome Saugat.

Greg says

TCPI in an overrun position without additional budget is a meaningless number. In evidence I offer your conclusion to the Overrun Calculation: “This means that you can continue with a Cost Performance Index of 0.67 to complete the project.” Continuing with Cum CPI of .67 only means the overrun is not getting worse. A TCPI of .67 is and indication of being able to run at 67% of future plan and meet budget. In this case with an overrun calculating a .67 TCPI is ridiculous, budget is gone.

Remember: • If the To Complete Performance Index is less than one, you are in a comfortable position.

I have never experience a comfortable overrun. Now I need my old pembok text to see what it says.

Fahad Usmani says

This is the definition of the TCPI.

HOUSSAM says

Hi Fahd, congratulations.

I come back to the example of TCPI using EAC = BAC/CPI. this suppose that you maintan your past performance cost.

Imagine now that this is not correct and that you have to maintain your 2 objectives : cost and deadline.EAC will be : AC+(BAC-EV)/(CPI*SPI)

In your example : BAC=100000USD/AC=60000USD/EV=40000USD

Suppose that PV=0.5*100000=50000USD(after half period of 6 months)

CPI=4/6=0.67/SPI=4/5=0.8

than EAC=60000+(100000-40000)/(0.67*0.8)=171940USD.

and finaly TCPI = (100000-40000)/(171940-60000)=60000/111940=0.54 which is coherent to respect deadline and budget and goes with the definition of TCPI.

Fahad Usmani says

Well said.

Dheeraj Kr. Pal says

Yes, This is other way to look. If you have to maintain Cost + Schedule.

Afzal says

Wow, You must be an excellent trainer, great explanation.

Fahad Usmani says

Thanks Afzal.

Bhupesh says

Thanks really helped me!

Fahad Usmani says

You are welcome Bhupesh.

Mustafa gul says

Brilliant explanation, great job Fahad

Fahad Usmani says

Thanks Mustafa.

Badredine says

Hi Fahad,

Excellent blog, well done and please carry on.

Through all the blogs, I have a problem with your example#2 which I do not believe is correct: your TCPI in example two should follow the standard formula based on BAC as your AC still below it (when we say under budget is comparing the actual to the planned – as we want to know if it is still possible to meet the budget and if yes with which future CPI, or actually CPI we need to increase our rate).

Thus, is you use standard TCPI formula (BAC-EV)/(BAC-AC)=(100k-40k)/(100k-60k)=1.5. This is the new CPI you must reach and if you do you will be spot on budget.

The other formula, is for over budget not based on current CPI but by having an AC superior already to the BAC, thus no way to make your budget anyway. So the idea is now to recalculate your new budget (EAC) and use it as new baseline to achieve. The upper part of the equation remains the same (BAC-EV) to express the remaining work (EV is a sub calculation of BAC by cumulating the completed work).

I believe that you need to change Example Case-2 with another one that shows the above over budget scenario.

Fahad Usmani says

In the second case we are Cleary over budget so we will use the formula based on EAC which is the new budget.

Bridget Ketiku says

Thanks so much. This was very helpful

Fahad Usmani says

You are welcome Bridget.

Gurbakhshinder Singh says

Become fan of your blogs fahad..excellent explanation which shows you have really great knowledge …its making very easy to understand each critical topics in pmp..thanks a lot for your efforts..

Fahad Usmani says

Thanks Gurbakhshinder for your visit and leaving your comment.